- Partnership With Goertek on Track To Produce Three New Headsets
in 2017 - New Lightning™ OLED Display To Drive VR Industry
- Four CES 2017 Innovation Awards
Kopin Corporation (NASDAQ:KOPN),
a leading developer of innovative wearable computing technologies and
solutions, today provided an update on its business initiatives and
reported financial results for the fourth quarter and fiscal 2016 ended
December 31, 2016.
“One of our primary goals in 2016 was to reach strategic partnership
agreements to commercialize our wearable technologies, and our
announcements at The Consumer Electronics Show (CES) in January proved
we were very successful,” said Dr. John C.C. Fan, Kopin’s President and
CEO. “We entered into agreements with Goertek, the largest manufacturer
of VR and AR products in the world, to jointly develop and commercialize
a range of technologies and wearable products. In conjunction with these
agreements, Goertek is taking an approximate 10% position in Kopin. We
also announced a partnership with Lenovo to develop and manufacture AR
headsets for the enterprise market.”
“In addition, we introduced new revolutionary technologies at CES and
received four Innovation Awards,” Fan continued. “We debuted the
LightningTM OLED micro display, which is targeted to the VR
markets. The world’s first 2K x 2K display at 1″ diagonal size and
operating up to 120 Hz, addresses many issues in current VR headsets,
including the large size and weight, the poor image quality due to low
display resolution, the heat the headset produces, and image lag, which
has led to the complaint that current VR systems have blurry images in
fast motion. The reaction to our Lightning OLED micro display was
overwhelming with many experts in the VR space commenting that it was
the most beautiful VR image they had seen. In addition Kopin is taking a
unique approach in the micro display industry by creating a fabless
model for cost effective manufacturing. With our patented technology for
improved performance over existing offerings and our low cost
manufacturing model, we believe Kopin can help drive the adoption of VR.”
“Whisper™ Chip was also a big part of our success at CES. Numerous
potential partners have now declared Whisper Chip superior to any other
technology for automatic speech recognition in noisy environments. As
consumers increasingly choose voice over touch for their interface, the
need for voice accuracy continues to grow.
“We are developing three new headsets with Goertek. Because Goertek has
unique insight into the leading AR/VR technologies, we view their
commitment to Kopin as a strong statement about our technology. The
first is a mobile VR headset incorporating the Lightning OLED micro
displays. The others are two AR headsets, one targeted for the
enterprise market and the other targeted for the health and fitness
market. All three headsets will include our industry leading
technologies and components.
“In our military business, the F35 fighter jet and Family Weapon Sight
(FWS) programs will continue ramping in 2017. We are optimistic the new
Administration’s emphasis on increased military funding will benefit
Kopin.
“During the fourth quarter of 2016 we had 5 patents granted and filed
for 6 new applications. In 2016 we had 37 patents granted and filed for
30 new applications. Overall we have over 300 patents and patents
pending, almost all of which are related to wearable applications.
Finally, we also have the financial resources to fund our strategy,
ending 2016 with $77.2 million in cash and cash equivalents. Our
progress this year positions Kopin for substantially increased revenues
in 2017, beginning late in the year. We are excited about the
opportunities ahead, and look for Kopin to lead the growth of the AR and
VR markets in 2017 and beyond,” concluded Dr. Fan.
Fourth Quarter Financial Results
Total revenues for the fourth quarter ended December 31, 2016 were $6.4
million, compared with $4.6 million for the fourth quarter ended
December 26, 2015. Sales of products for Wearable applications were $1.5
million for the fourth quarter of 2016 as compared to $1.7 million in
the fourth quarter of 2015.
Net loss for the fourth quarter of 2016 was $5.2 million, or $0.08 per
share, compared with net loss of $7.0 million, or $0.11 per share, for
the fourth quarter of 2015. Included in the fourth quarter net loss is a
gain of $1.0 million for the final payment of an amount that was held in
escrow from the sale of an investment.
Full Year Results
Total revenues for the twelve months ended December 31, 2016 were $22.6
million, compared to $32.1 million for the same period in 2015.
Research and development expenses for 2016 were $16.0 million compared
with $17.6 million in the same period of 2015.
Selling, general and administrative expenses were $17.0 million in 2016,
compared with $18.1 million in the same period of 2015.
Included in the 2016 results was a gain on the sale of our Korean
property and plant of $7.8 million and a gain of $1.0 million for the
final payment of an amount that was held in escrow from the sale of an
investment. 2015 results included a $9.2 million gain from the sale of
investments.
The net loss for the 12 months ended December 31, 2016 was $23.4 million
or $0.36 per share, versus a net loss of $14.7 million or $0.23 per
share for 2015.
We have maintained our strong financial position. Net cash used in
operating activities for the twelve months ended December 31, 2016 was
approximately $26.1 million. Kopin’s cash and equivalents and marketable
securities were approximately $77.2 million at December 31, 2016 as
compared to $80.7 million at December 26, 2015 and we have no long-term
debt.
All amounts above are estimates and readers should refer to our Form
10-K for the year ended December 31, 2016 for final disposition of all
matters including the final accounting and disclosures associated with
the embezzlement at our Korean subsidiary.
On November 8, 2016 we issued a press release and filed a Form 8-K that
announced that, based upon preliminary findings, we had discovered
instances in which an employee at one of our majority-owned foreign
subsidiaries appears to have embezzled money from Kopin. As a result of
our investigation into the matter we were unable to file our Form 10-Q
for the three and nine month period ended September 24, 2016 on the
required due date. Nasdaq has granted Kopin an extension to file its
Form 10-Q until May 2, 2017.
Financial Results Conference Call
In conjunction with its fourth quarter and full year 2016 financial
results, Kopin will host a teleconference call for investors and
analysts at 8:30 a.m. ET today. To participate, please dial (877)
709-8150 (U.S. and Canada) or (201) 689-8354 (International). The call
will also be available as a live and archived audio webcast on the
“Investors” section of the Kopin website, www.kopin.com.
About Kopin
Kopin Corporation is a leading developer and provider of innovative
wearable technologies and solutions for integration into head-worn
computing and display systems to military, industrial and consumer
customers. Kopin’s technology portfolio includes ultra-small displays,
optics, speech enhancement technology, system and hands-free control
software, low-power ASICs, and ergonomically designed smart headset
reference systems. Kopin’s proprietary components and technology are
protected by more than 300 global patents and patents pending. For more
information, please visit Kopin’s website at www.kopin.com.
Kopin, Whisper, Lightning and Solos are trademarks of Kopin Corporation.
Forward-Looking Statements
Statements in this press release may be considered “forward-looking”
statements under the “Safe Harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These include, without limitation,
statements relating to the joint development and commercialization of a
range of technologies and wearable products with Goertek and Goertek’s
taking an approximate 10% position in Kopin; our partnership with Lenovo
to develop and manufacture AR headsets for the enterprise market; our
taking a unique approach to manufacturing in the micro display industry,
creating a fabless process in order to access cost effective
manufacturing; our belief that our patented technology for improved
performance over existing offerings and our low cost manufacturing
model, can help drive the adoption of VR; our belief that as consumers
increasingly choose voice over touch for their interface, the need for
voice accuracy continues to grow; that we are developing three new
headsets, one of which will include our Lightning OLED micro display for
mobile VR market, one of which is targeting the enterprise market, and
one of which is targeting the health and fitness market, and expected
these new headsets to ship before year end; all three headsets will
include our industry leading technologies, Kopin displays, optics and
our WhisperChip; our military business, the F35 fighter jet and Family
Weapon Sight (FWS) programs, continue ramping in 2017; we are optimistic
the new Trump Administration’s emphasis on increased military funding
will benefit Kopin; we also have the financial resources to fund
our strategy, ending 2016 with $77.2 million in cash; our progress this
year positions Kopin for substantially increased revenues in 2017,
beginning late in the year; and our excited about the opportunities
ahead, and look for Kopin to lead the growth of the AR and VR markets in
2017 and beyond.These statements involve a number of risks and
uncertainties that could cause actual results to differ materially from
those expressed in the forward-looking statements. These risks and
uncertainties include, but are not limited to, the following: We may not
jointly develop and commercialize a range of technologies and wearable
products with Goertek; agreement to sell common stock of Kopin to
Goertek, which represents an approximate 10% position in Kopin may not
occur; the partnership with Lenovo to develop and manufacture AR
headsets for the enterprise market may not materialize; our fabless
approach to manufacturing may not work or provide a cost effective
product; consumers may not choose voice over touch for their interface
and the need for voice accuracy will not continue to grow; one, two or
all three of the VR headsets we are collaborating on with Goertek may
not be developed or offered for sale or shipped by the end of 2017; the
headsets may not include one or any of Kopin displays, optics and
WhisperChip technologies; our military business, and in particular the
F35 fighter jet and Family Weapon Sight (FWS) programs, may decline
because our products are not accepted by our customers, the programs may
not be funded, the programs may be cancelled, our customers may select a
competitor’s product instead of ours; the new Trump Administration may
not increase the military budget and, even if it does, it may not
benefit Kopin; we may not have sufficient cash to fund our strategy; we
may not have substantial or any revenue increases in 2017; the AR and VR
markets may take longer to develop than we anticipate; there may be no
demand for our AR and VR products; and we may not have the financial
resources to fund our strategy; it may take longer than Kopin estimates
to develop products; Kopin’s products may not be accepted by
the market place; there may be issues that prevent the adoption or
further development of Kopin’s technologies;Kopin might be
adversely affected by competitive products and pricing; the Company
could experience the loss of significant customers; costs to produce
Kopin’s products might increase significantly, or yields could decline;
Kopin’s customers might be unable to ramp production volumes of their
products, or Kopin’s product forecasts could turn out to be wrong; and
other risk factors and cautionary statements listed in Kopin’s periodic
reports and registration statements filed with the Securities and
Exchange Commission, including the Annual Report on Form 10-K for the 12
months ended December 26, 2015, and Kopin’s subsequent filings with
the Securities and Exchange Commission. You should not place undue
reliance on any forward-looking statements, which are based only on
information currently available to Kopin and only as of the date on
which they are made. We undertake no obligation to update any of these
forward-looking statements to reflect events or circumstances occurring
after the date of this release.
| Kopin Corporation | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (Unaudited) | |||||||
| December 31, 2016 | December 26, 2015 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and marketable securities | $ | 77,197,896 | $ | 80,710,780 | |||
| Accounts receivable, net | 1,699,195 | 1,574,973 | |||||
| Inventory | 3,302,112 | 2,512,473 | |||||
| Prepaid and other current assets | 1,194,901 | 1,357,996 | |||||
| Note receivable | – | 15,000,000 | |||||
| Total current assets | 83,394,104 | 101,156,222 | |||||
| Land, equipment and improvements, net | 2,979,585 | 2,677,103 | |||||
| Goodwill and intangible assets | 844,023 | 946,082 | |||||
| Other assets | 618,140 | 461,416 | |||||
| Property and plant, held for sale | – | 819,263 | |||||
| Total assets | $ | 87,835,852 | $ | 106,060,086 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 4,355,463 | $ | 3,959,704 | |||
| Accrued expenses | 5,457,484 | 4,702,574 | |||||
| Deferred income taxes | 2,571,000 | 1,207,000 | |||||
| Billings in excess of revenue earned | 981,761 | 1,407,566 | |||||
| Total current liabilities | 13,365,708 | 11,276,844 | |||||
| Lease commitments | 246,922 | 298,463 | |||||
| Total Kopin Corporation stockholders’ equity | 74,108,863 | 94,740,875 | |||||
| Noncontrolling interest | 114,359 | (256,096 | ) | ||||
| Total stockholders’ equity | 74,223,222 | 94,484,779 | |||||
| Total liabilities and stockholders’ equity | $ | 87,835,852 | $ | 106,060,086 | |||
| Kopin Corporation | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended |
Twelve Months Ended |
|||||||||||||||
| December 31, 2016 | December 26, 2015 | December 31, 2016 | December 26, 2015 | |||||||||||||
| Revenues: | ||||||||||||||||
| Component revenues | $ | 5,517,878 | $ | 4,428,880 | $ | 21,115,125 | $ | 28,163,118 | ||||||||
| Research and development revenues | 855,469 | 183,015 | 1,527,441 | 3,891,301 | ||||||||||||
| 6,373,347 | 4,611,895 | 22,642,566 | 32,054,419 | |||||||||||||
| Expenses: | ||||||||||||||||
| Cost of component revenues | 3,957,802 | 4,664,096 | 17,861,271 | 21,694,826 | ||||||||||||
| Research and development | 3,757,041 | 3,878,820 | 16,039,661 | 17,631,413 | ||||||||||||
| Selling, general and administrative | 4,938,056 | 4,081,531 | 16,961,773 | 18,134,580 | ||||||||||||
| Gain on sale of property and plant | – | – | (7,767,200 | ) | – | |||||||||||
| 12,652,899 | 12,624,447 | 43,095,505 | 57,460,819 | |||||||||||||
| Loss from operations | (6,279,552 | ) | (8,012,552 | ) | (20,452,939 | ) | (25,406,400 | ) | ||||||||
| Other income (expense), net | 2,037,008 | 950,439 | 618,472 | 10,585,776 | ||||||||||||
| Loss before (provision) benefit for income taxes, equity loss in | (4,242,544 | ) | (7,062,113 | ) | (19,834,467 | ) | (14,820,624 | ) | ||||||||
|
unconsolidated affiliate and net (income) loss from noncontrolling interest |
||||||||||||||||
| (Provision) benefit for income taxes | (912,000 | ) | (12,500 | ) | (3,130,000 | ) | 25,000 | |||||||||
| Loss before equity loss in unconsolidated affiliate and net | (5,154,544 | ) | (7,074,613 | ) | (22,964,467 | ) | (14,795,624 | ) | ||||||||
| loss from noncontrolling interest | ||||||||||||||||
| Equity loss in unconsolidated affiliate | – | – | – | (47,443 | ) | |||||||||||
|
Net loss before net (income) loss attributable to noncontrolling interest |
(5,154,544 | ) | (7,074,613 | ) | (22,964,467 | ) | (14,843,067 | ) | ||||||||
| Net (income) loss attributable to noncontrolling interest | (35,331 | ) | 113,557 | (402,971 | ) | 149,651 | ||||||||||
| Net loss | $ | (5,189,875 | ) | $ | (6,961,056 | ) | $ | (23,367,438 | ) | $ | (14,693,416 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.36 | ) | $ | (0.23 | ) | ||||
| Diluted | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.36 | ) | $ | (0.23 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 64,138,117 | 63,607,538 | 64,043,897 | 63,465,797 | ||||||||||||
| Diluted | 64,138,117 | 63,607,538 | 64,043,897 | 63,465,797 | ||||||||||||
| Kopin Corporation | ||||||||||||
| Supplemental Information | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| December 31, 2016 | December 26, 2015 | December 31, 2016 | December 26, 2015 | |||||||||
| Display Revenues by Category (in millions) | ||||||||||||
| Military Applications | $ | 1.8 | $ | 1.2 | $ | 5.3 | $ | 10.2 | ||||
| Wearable Applications | 1.5 | 1.7 | 7.4 | 12.3 | ||||||||
| Industrial Applications | 1.7 | 1.1 | 6.3 | 4.0 | ||||||||
| Consumer Electronics Applications | 0.5 | 0.4 | 2.1 | 1.7 | ||||||||
| Research and Development | 0.9 | 0.2 | 1.5 | 3.9 | ||||||||
| Total | $ | 6.4 | $ | 4.6 | $ | 22.6 | $ | 32.1 | ||||
| Stock-Based Compensation Expense | ||||||||||||
| Continuing Operations | ||||||||||||
| Cost of component revenues | $ | 135,000 | $ | 109,000 | $ | 562,000 | $ | 730,000 | ||||
| Research and development | 149,000 | 107,000 | 527,000 | 777,000 | ||||||||
| Selling, general and administrative | 661,000 | 142,000 | 1,336,000 | 1,639,000 | ||||||||
| $ | 945,000 | $ | 358,000 | $ | 2,425,000 | $ | 3,146,000 | |||||
| Other Financial Information | ||||||||||||
| Depreciation and amortization | $ | 44,000 | $ | 279,000 | $ | 994,000 | $ | 2,139,000 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170313005438/en/
Kopin Corporation
Richard Sneider, 508-870-5959
Treasurer
and Chief Financial Officer
Richard_Sneider@kopin.com
or
Market
Street Partners
Joann Horne, 415-445-3233
JHorne@marketstreetpartners.com